Square, a prominent player in payment processing renowned for its extensive use of card readers, is strategically entering the Canadian cannabis market. In a recent announcement, the company disclosed its collaboration with Jane Technologies, an online sales platform facilitating delivery and in-store pick-ups for marijuana purchases.
With the partnership with Jane, Square is rolling out an exclusive early access initiative tailored to Canada’s licensed dispensaries. This initiative allows Ontario’s authorized cannabis sellers to initiate trials of Square for retail point-of-sale solutions in their stores before a broader rollout.
Beyond the core function of payment processing, Square’s expanded services for cannabis clients encompass dynamic features such as real-time inventory tracking across various store locations and compliance alerts triggered when an order surpasses the prescribed purchasing limits for marijuana products in Canada.
Roshan Jhunja, Square’s head of retail, emphasized the company’s commitment to addressing the challenges faced by cannabis dispensaries. According to Jhunja, these establishments encounter limited options for reliable and integrated commerce tools, necessitating an easily navigable, fully integrated omnichannel solution for in-person and online operations to alleviate joint pain points.
As a widely recognized industry-leading payment processor and POS provider, Square’s foray into the cannabis space is poised to exert pressure on existing competitors. Several competitors operate on a smaller scale than financial services with more traditional approaches, focusing specifically on collaborating with marijuana-related and other regulated businesses.
Socrates Rosenfeld, CEO of Jane Technologies, praised Square’s reputation as a leading global commerce platform. The partnership with Jane is seen as an organic and harmonious progression, aligning with their shared ethos of empowering brick-and-mortar retailers with top-notch digital tools.
Jane, the online platform, powers over 2,500 retailers and brands across Canada and 39 states in the U.S. The federal illegality of marijuana in the United States restricts many cannabis companies from accepting card payments. This legal constraint forces many banks to steer clear of the cannabis industry, causing some cannabis companies to resort to unconventional methods like using “cashless ATMs” that miscode cannabis sales and deem them simple cash withdrawals.
This complex scenario extends to state-level challenges, such as a Maryland official acknowledging the difficulty of y categorizing cannabis-related tax revenue properly. While facing criticism for potentially protecting banks involved in federally illegal activities, the state and the involved bank maintain that transactions comply with applicable laws and regulations.
A crucial legislative vote has taken place to ease banking restrictions on cannabis businesses. An alliance of 35 cannabis trade associations, groups dedicated to drug policy reform, and a leading national labor union issued a letter urging Congress to address the “humanitarian toll” on cash-intensive marijuana businesses by promptly passing the banking bill within the year.
While marijuana businesses have encountered recurring banking hurdles, Square has had active engagements with CBD companies since 2019. That same year, the company initiated an invite-only pilot program, providing services to CBD sellers and expanding the program the following October. Square’s longstanding involvement and latest collaboration with Jane position the company as a notable player in Canada’s cannabis sphere.